The "SPREAD"
covers the "broad" market and it
is our creation.
It includes the several
thousandstocks
on the New York Stock Exchange
(NYSE)
and the approximate1750stocks
in the Value Line Index
(VL). This SPREAD is the difference between the
two indices.
The wider the more "BULLISH" the market is.
The narrower the more "BEARISH"!
The (#'s on right)
and the "Green Bars" (bottom of chart) are the same.
They show the distance between to two closing points.

TheSPREAD closed Friday 8/11/2017, at 4,356.30, off -105.11 (-2.36%)this past week
vsoff -47.68 (-1.06%)the previous week.
The SPREAD pulled back out of bear market territory 74 weeks ago and out
of correction territory 67 weeks ago with a current discount to the 52-week
high at off -4.39%. One definition of a correction is a discount to the 52 week high
of 10%. A bear market is a discount to the 52 week high of 20%.

TheSPREADset a new all-time high at 4,556.27on 7/26/17 and is currently up 2.81% on the year. The 52
week low is 3743.73
set on 11/03/2016. The SPREAD finished 2016 up 23.93%.

We are
watching the VL climbing faster than the NY, making the markets more overvalued everyday. These two
indices are
basically the same market, it's just that one has a few
hundred large over-the-counter stocks and the other has no over-the-counter
stocks. When both indices are climbing we get a
strong bullish sign for the near term markets, but when both indices
are falling we get a bearish sign for the weeks ahead. Its when the VL
falls faster than the NY that we have to worry about.

My
concern now is since
they are the same markets they should never be so far apart. I
believe we will see a major drop when VL starts falling faster than the NY.

One
thing to note is the chart above covers over 20 years, therefore
changes take time, meaning there could still be a few months left for
the bull.

The
distance between the two
(spread) continues to grow, if the VL is climbing faster than the NY,
or shrink, if the VL is falling faster than the NY. If we see the NY
climbing while VL starts falling we could be seeing the very first sign
of a sizable correction starting.

Sincethe big OTC stocks are part of
the VL index, when the big OTC stocks fall, the VL falls. If the VL is
losing ground faster than the NY, it means the big OTC stocks are
selling more than the NY stocks. If the VL is climbing faster than the
NY, it would mean more buying in the OTC stocks. The SPREAD climbs when
the VL is stronger and falls when the VL is weaker. A great way of
knowing what side of the market is doing the best.

The
SPREAD is unique to the Stocks in the Spotlight since we
designed it in 1090 by producing an "equal
value equation"
allowing a better view of the
longer term markets when comparing the big OTC stocks to the New York
Exchange listed stocks.

TheSPREAD covers such a broad
market that it offers a look at the "big" picture. The idea behind the SPREAD is that if we see
the New York (NY) index rising faster than the
Value Line (VL) we know that the stocks traded on the NY are getting
more activity but stocks on the Over-The-Counter (OTC) are not getting
as much interest.

The
reason for this action is because none of the large OTC stocks trade on
the NY. No matter how many shares of Microsoft trade, or how many
dollars it may change, it will not show up on the NY. Companies such as
DELL, Yahoo!, Liz Claiborne, are just a few of the (OTC) stocks not on
the NY. Therefore, if the VL rises faster than the NY we know the
buying is coming into the big OTC stocks and if we see the VL fall
faster we know there is greater selling in the big (OTC)
stocks.

We
end up with a theory:

The MARKETS
are not able to move very far, in either direction, without
the SPREAD!

The SPREAD tells us the "real game" the whole market is playing.

Our
SPREAD index is different
than the normal Value Line/New York
Spread due to the fact that we assigned each index equal weight in 1990
when
the VL crossed under the NY, the only time it ever happened. You can
keep your own
Spread by subtracting the close of the NYSE from The close of the VL.
The number you will be left with is the actual "difference" between the
two indices
or the "SPREAD". (remember that the number will not be
the same as ours, because of our equal weighting, but the concept will
be)